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The Clarion - Dave Says

Dave Says 7-30-14

Dave Says 

Dear Dave,

My wife and I have $25,000 in credit card debt, $2,500 in medical bills and $89,000 each in student loan debt from when we each got our masters’ degrees.

 

Hands off the 529

Dear Dave,
My wife and I have $25,000 in credit card debt, $2,500 in medical bills and $89,000 each in student loan debt from when we each got our masters’ degrees. We make about $100,000 combined. Our son is 6 years old, and we have $18,000 in a 529 plan for him. Should we use that money to pay off debt instead?
Sean

 

Don't leave an estate with life insurance

Dear Dave,
My mom is 71 and debt-free. She’s investing $600 a month in a universal life insurance policy worth $250,000 because she wants to leave something behind when she dies. What could she invest this money in, other than the life insurance policy, in order to leave an estate?
Steve

 

Who do you want to hang out with?

Dear Dave,
I have job offers from two tech companies. One is in San Antonio and pays $55,000 a year, while the other is in Silicon Valley making $100,000 a year. My friends are advising me to move to California, but I feel like I’d have more money in my budget if I moved to San Antonio. What do you think?
Aaron

 

Dave Says 7-09-14

Dave Says

(Contentment is a state of being)


 

Dave Says 07-02-14

Housing includes taxes and insurance

Dear Dave,
You recommend that no more than 25 percent of your monthly income go toward a house payment. Does this figure include taxes and insurance too?
Ryan

Dear Ryan,
Yes, it does. Your housing payment should not exceed 25 percent of your monthly take-home pay on a 15-year, fixed-rate mortgage.
When it comes to buying a house, the goal is not to live in the TajMahal or have something so expensive you end up being “house poor.” When buying a home, especially for first-time homebuyers, you should look for something nice — in a decent area — that you can get paid off as quickly as possible.
It’s really not a big deal if you cheat a couple of percentage points one way or the other. But 25 percent is a good rule of thumb to ensure you’ll still have money left over to live on, save and invest!
—Dave

Be very kind and very grateful

Dear Dave,
My mom and dad took out a whole life insurance policy for me when I was born. The cash value is $2,500, and my husband and I want to cash it out and put the money toward paying off debt. We already have larger term life insurance policies in place, but I’m worried that doing this will offend my parents. What should I do?
Laura

Dear Laura,
I think the real question is how many toxic things will you do because you’re afraid you might offend them.

   

Dave Says 06-25-14

Where are you in your financial plan?

Dear Dave,
What things do you advise buying used versus buying brand new?
Amy

   

Dave Says 6-11-14

Dave Says

   

Dave Says 06-04-14

Millionaire widow needs a prenup

Dear Dave,
My husband died several years ago. He always worked very hard, and we did very well financially. I am now 48 and have $3.8 million in assets. I’ve found a wonderful man who is very stable and loving with a good job, and we’re considering getting married. Do you think I need a prenuptial agreement?
Heather

   

Dave Says 05-21-14

Paying the right amount for a house
Dear Dave,
I know you recommend that no more than 25 percent of your take-home pay should go toward rent or a mortgage payment. Should taxes and insurance be figured into this amount?
Kayla

   

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